Will the Philippines need its mighty FIST?

In May, Benjamin Diokno, governor of Bangko Sentral ng Pilipinas (BSP), proudly announced the formation of a new ‘bad bank’ asset management company regime under the Financial Institutions Strategic Transfer Act - known by the bold and bracing acronym, FIST.

How banks got away with the pandemic

Diokno had his reasons for being proud of the endeavour. In years past, the Philippine banking sector has suffered for its lack of resilience. In the aftermath of the Asian financial crisis, the NPL ratio in the Philippines averaged 20.2% from 1999 to 2002, according to the Asian Development Bank. But the Philippines has changed in many ways: it built a bad bank institution back then too, but it took about five years to do it.